The Minister for the Environment, Mr Dempsey, has denied he is trying to penalise Galway for its successful introduction of waste recycling in the city area.
The Minister dismissed as "the usual mix of misrepresentation and conspiracy theory" a claim by the Galway for a Safe Environment (GSE) group that he is trying to "sabotage the most successful recycling scheme" in the State.
GSE spokesman Dr Conchúr Ó Brádaigh accused the Minister of wanting to see the scheme fail, because of his support for incineration or thermal treatment.
Meanwhile, Galway city manager Mr John Tierney has expressed "disappointment" at the Minister's decision to grant-aid capital costs for recycling after January 1st of this year under the new Waste Management Infrastructural Grant Scheme. Galway's scheme was initiated last year - which means it does not qualify for this aid - at a cost of €2.6 million.
However, some €840,000 of this would have been eligible for a 75 per cent grant.
"We do still have €2 million to €3 million to spend on further developments, and so we would hope to get support towards that," Mr Tierney emphasised.
The Department's decision did not mean there would be any increase in household refuse charges, he added.
Galway currently exceeds all national target expectations, with a 57 per cent diversion from landfill. This is partly due to recycling, and partly due to non-presentation of waste, Mr Tierney said.
The recycling rate is running at about 35 per cent, and he is confident this can be increased.
The GSE campaign condemned the Minister's decision to apply grant-aid from this year only, and said Mr Dempsey would "prefer to see the Galway city scheme collapse due to lack of funding than to see it succeed".
This was because Galway had shown that incineration was not necessary if the EU target of 50 per cent diversion from landfill was to be attained, Dr Ó Brádaigh said.